The latest UK consumer inflation data will be watched closely on Tuesday

The latest UK consumer inflation data will be watched closely on Tuesday and a lower than expected reading would dampen expectations surrounding the need for higher interest rates while any move in the headline rate to 2.0% or higher would increase speculation that the Bank of England could be pushed towards an earlier than expected tightening.

 

Sterling was able to hold above the 1.2500 level against the dollar on Tuesday with a firm underlying tone.